Memo to McCain: Stop using the Sonic credit scare story
Look, I’m pessimistic about many aspects of the economy. Anyone who has followed my coverage of the subprime crisis and stimulus-palooza over the last year knows that. But the out-of-control rumor-mongering from the panicked bailout peddlers (many of whom were “fundamentals of the economy are sound” Pollyannas just a few weeks ago) is ridiculous. The skies are gray, but they are not falling because of the bailout defeat.
I noted the “McDonald’s can’t get credit!” lie earlier this week. Now, the “Sonic can’t get credit!” scare story is making the rounds — and John McCain is leading the way:
Mr. McCain, the Republican nominee, told a business roundtable in Des Moines that the evaporation of credit was already making it harder to get loans for students at a technical college in Milwaukee and for Sonic, the drive-through burger chain.
“When small businesses and big businesses like Sonic franchisees can’t borrow, contractors don’t get the remodeling work, equipment makers lose sales, and restaurants go out of business,” Mr. McCain said. “It hurts the entire community.” (link)
Former GOP Rep. Ernest Istook e-mails: “Some are citing Oklahoma City-based Sonic Drive-Ins as an example of a credit crunch, with stories that a lender to Sonic’s franchisees (GE Capital) had stopped lending to them. However, Sonic’s own press release paints a very different picture, saying this was only a minor source of lending. People should therefore be cautioned against using this supposed example of credit crunch.”
Indeed. Here’s the press release:
Contact: Claudia San Pedro
Treasurer and Vice President of Investor Relations
(405) 225-4846
SONIC COMMENTS ON GE CAPITAL FINANCING FOR FRANCHISEESOKLAHOMA CITY (September 26, 2008) – Sonic Corp. (NASDAQ: SONC), the nation’s largest chain of drive-in restaurants, today commented on remarks in the media concerning GE Capital and the reported pullback it is making in financing for franchisees. Sonic clarified that during the past year GE Capital provided less than 10% of the lending to its franchisees. GE is just one of many lenders who finance Sonic franchisees and, in fact, many franchisees maintain access to other diversified sources of financing. Furthermore, Sonic has not received any notification from GE Capital, either directly or indirectly, that it will stop financing new loans to Sonic franchisees.
About Sonic
Sonic, America’s Drive-In, originally started as a hamburger and root beer stand in 1953 in Shawnee, Okla., called Top Hat Drive-In, and then changed its name to Sonic in 1959. The first drive-in to adopt the Sonic name is still serving customers in Stillwater, Okla. Sonic has more than 3,400 drive-ins coast to coast, where more than a million customers eat every day. For more information about Sonic Corp. and its subsidiaries, visit Sonic at www.sonicdrivein.com.
Someone alert Team McCain — and make sure that Sarah Palin doesn’t recycle her running mate’s misleading talking points during Thursday’s debate.
Leave the tall tales to Joe Biden.
Please.
***
Yes, some borrowers are feeling the credit squeeze — there’s no question that Main Street will feel pain — but as I pointed out yesterday and I’ll repeat again today, not everyone’s falling off a cliff:
Crisis Felt Unevenly on Main Street
Wall Street Credit Crisis Rings Hollow on Main Street
No credit freeze on Kern’s Main Street
No credit crisis for local banks
Community banks aren’t yet feeling pinch of Wall Street meltdown
Wall Street may be collapsing, but banks here are strong
“There’s been a slight change but nothing significant.”
“I believe that all the banks I’m aware of in our marketplace are financially strong.”
Farmers still able to get banks’ loans
Small town Main Street doing better than Wall Street
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Politicians do not have the faith in the resilience of Americans that Americans do. If one business fails, another will pop up to take its place. Give entrepreneurship a chance.
First, even if the sky is falling, socialism is BAD, BAD, BAd.
Second, this is mostly scare mongering. We need to wake people up to this.
I know you were up late digging into this stuff, God Bless You MM, we dearly do need you.
Oh no! It’s the end of civilization as we know it!
No bailout.
McCain’s ad’s are good, but his speeches need to be updated just as “vigorously”.
I know for a fact that the SONICs in my area closed several years ago.
McCain needs to do his homework before using this particular business as an example.
Sonic can’t get Credit for making a good burger and french fries either. (barf)
Unless something changed during the night, it is time to start calling the Senate to stop this nonsense!
My friend is working on a site that will allow you to fax the entire Senate in 23 seconds. It isn’t a for-profit endeavor – he’s just working for the cause.
http://www.youtube.com/watch?v=yKUDGCh79Mo
And don’t let anyone spin the “AT&T can’t get credit either” story.
They had an issue one night a week ago… but haven’t had an issue since.
So it’s not a sky is falling thing. But the CNBC talking heads will try to use it as a Poster Child for their Bailout plea.
It’s not that big of a deal.
There’s another issue that seems silly to me every time I hear it come up: the Student Loan lie.
I have heard no real proof that Student Loans have stopped becoming accessible.
And, if there interest rate goes up, perhaps this will put pressure on Universities to lower tuition — which has skyrocketed over the last couple of years.
There is no doubt the MSM will take this major mistep and pound on it constantly until they get a clip of BHO saying “Look, John McCain made a mistake illustrating the crisis we are in right now. What we need to do is focus on the solution to this problem.”
It’s how to turn BS into gold.
The McDonald’s story on getting no credit was on the local NBC station last night and I had to laugh. Everyone wants to start a panic. The only panic I am worried about is if Congress passes a bail;out that I have to pay for.
Credit in every pot.
So, let me get this straight… a business can’t get credit (for whatever reason) and I’m duty bound to ensure that they do?
Surely I slipped into a parallel universe.
I don’t like those stupid Sonic commercials anyway.
Is McCain personally sabotaging his campaign? What an absolute arrogant ass!
John McCain, being the better choice of the two candidates, said it well during his debate, speaking of conservatives:
“We came to Washington to change it, but it has changed us.” In my parents era it was the Democrats that watched out for the people. Then it became the Republicans. Now it seems, there is little distinction between the two as far as fiscal conservatism.
I have argued for years that we should have, at the least, “line item veto”, if not actual single item bills. The counter argument is always the same: “If we did that no laws would get support enough to pass.” I agree, and blame that conundrum on the trash that we elect to “serve” us.
Long, long ago, terms were established, (not term limits), so that successful business sorts, farmers, and others would go into government for a short time and lend their particular expertise. That is out the window, replaced by government being a way of life. Politicians now owe we voters a thanks for sending them to Washington to serve themelves. God Bless America.
nuf sed
That chicken picture looks creepy man.
This is such Horse___. Anyone who has good credit can get credit. duh.
The way it should have always been… Thank you Clinton! grrrrrrrrrr.
People and corporations are still getting credit – it’s just that the lenders are more picky about terms and credit rating. You may have to put more down on a home or clean up your existing debt first, but is that a bad thing? Many of those who are not getting loans are living too close to the edge anyway.
I’m rather amused at these stories of not being able to get credit. My business just yesterday received 3 calls offering equipment credit and one on a building expansion that we’ve been contemplating. If credit is so tight, why are these institutions falling all over themselves to extend credit here.
As AJ said, if you are credit worthy, credit is available.
Here at work we haven’t changed our credit terms and non of our vendors have changed theirs. Our accounts that were ‘net 30 are still ‘net 30′. Those that were ‘COD’ are still ‘COD’.
Gee, you’d think popular fast food joints would have enough cash in the till from yesterday to pay today’s delivery man on the spot. Then, from today’s profits, they could go ahead and pay for tomorrow’s delivery when it arrives. Repeat.
What is cash?
It is government-issued green paper once popularly used by Americans to immediately pay for the things they purchased, ‘pay as you go’ so to speak.
Yes, we were all radicals once, back in that day before we adopted Popeye character Blimpie’s financial attitude, “I’ll gladly pay you Tuesday for a hamburger today.”
Republican misdirection. Nobody in the financial markets thinks there isn’t a credit crisis. The Sonic story does not change that. I haven’t heard it on the non-Fox media.
Trust McCain and the Republicans to be a source of misinformation.
lgm,
Misdirection from what? Don’t you realize that McCain’s stance is FOR the bailout? Whatever it is that you are smoking, please stop.
Market Jumps Though Bailout Fails! The Naked Oligarchy
Yesterday, the oligarchy predicted Armageddon. Armageddon didn’t come. Tuesday the Dow went up almost 500 points. The markets went up without the bailout. But today, Bush and Obama and Paulson and McCain still want the bailout.
McCain says they’ll do it whether you want it or not. The bailout it not designed to help the economy. The bailout is designed to help the oligarchy.
The agents of the oligarchy were enraged when they heard the voice of the people say that they would not give Wall Street another penny. Republican hacks decried populism. Democrat leftists raged that the people would not go along with their plan for socializing the economy.
The oligarch-in-chief, George W. Bush, came out today and said, “It matters little what a path a bill takes to become law. What matters is that we get a law.” And, John McCain, the great conservative, said today that, “The Treasury has at its disposal about a trillion dollars that they could begin, without congressional authority, buying up some of these terrible mortgages and help stabilize the situation.”
So McCain says screw the people, we’ll bailout Wall Street anyway. Without the approval of Congress. Without the approval of the people. This is the oligarchy in its most naked, insidious form.
The oligarchy will do anything it has to to get what it wants. It will try to scare you by saying you won’t be able to get a car loan. It will try to threaten you by saying that the markets will crash if it doesn’t get its way.
But if you still say no – and the American people said no loud and clear yesterday – they will say, “Screw you, we’re doing it anyway. We know better than you. We’ll do what we want to.”
SCARE TACTICS??? It worked before… ILLEGAL IMMIGRATION anyone??? It sure worked good on that one… 70 to 75 percent of the AMERICAN PEOPLE strongly against “COMPREHENSIVE IMMIGRATION REFORM”… Credit is tighter, even for MC DONALD’S and SONIC… Now you may need to have a bit more INFO then your NAME and ADDRESS to get a loan… How UNIQUE!!!
stevevvs,
Well said.
lgm, even your man Dennis Kucinch said it was a bad deal. Call him and ask about misdirection. While your at it call Maxine and Barney.
And Stretch Pelosi’s tirade before the House vote was what?
All the evidence that Jimmah and BJ set the conditions for this financial balloon to inflate and Bawney, Doddle, Chucky, and Maxine defended it as it grew to the bursting point is right there in the archives of your beloved bird-gage liner of record, the NY Slimes. Both lens in your glasses must be set for your left eye.
BTW, I’m beginning to think lgm is this site’s designated pain in the a$$.
Does that chicken in the photo have a head?
ditto, et post #19. WE have more than 20 vendors and everyone is still net 30. In fact, our sales have climbed over the past two weeks. This crisis is a sham. The sun rose yet again tday.
I can only think that McCain is complicit in what is going on.
I am in the financial market and I don’t think their is an credit crises. So I guess this exposes another one of your lies.
Seargent Tim, a lot of us here have already passed the “I’m beginning to think stage…he is the designated pain in the a$$. As someone said yesterday in a post, as misinformed as he is, he’s still ours.
In other words, this is no different from any other crisis. The strong survive, the weak get weeded. And the economy, and life itself, go on.
The old Russian proverb applies, “If all you have is a hammer, treat everything like a nail.”
McCain, Obmama, Reid, Pelosi, Boehner, all of them only know government. Thus, the solution (hammer) must be government. I have reached the conclusion that their premise for action is totally false.
My mother told me this story. A girlfriend of hers called her husband and work and said, “The car won’t start.” Her husband asked, “What would you do if I was dead?”
Her response was, “I’d call a tow truck.” He replied, “Well there’s your answer.” With that he hung up and went back to work.
Message to Wall Street, “Your monkey.”
And to quote the late John Wayne, “Life is tough. It’s tougher when you’re stupid.”
We know the CRA of Carters 1977 presidency is the direct antecedent of todays “crises”. Where was the credit industry when that legislative dog was passed? Now that it has fatally mauled some entities in the credit industry where are the survivors now? They should be running full paid ads in all the newspapers and infomercials on TV and radio. Why is the credit industry so quiet on their own behalf?
Instead we have a bunch of politicians running around crying that the credit industry needs saved! Finest politicians money can buy?
Let the rats drown in their own toxic debt and vote out politicians who want to save them.
I would like to note that MY corrupt politician, Rep. Doolittle, DID NOT vote for the crap sandwich. God bless him…for that.
And to quote the late John Wayne, “Life is tough. It’s tougher when you’re stupid.”
Where are they when we really need them. Succinct, to the point and well said.
The only thing wrong with MY budget is the price I have to pay for gasoline.
“Song of the South”..
“someone told us Wall Street fell,
but we were so poor that we couldn’t tell”
It’s General Electric, aka, liberal NBC’s enabling onwers! Surely no is surprised that they’re withdrawing credit lines, given the poor financial decisions and liberal direction Immelt has taken that company.
President McCain’s camp should have known better than to cite a company like GE as an indicator that mainstreet is beginning to feel the crunch – especially when it is that company supplies Iran with industrial equipment, employs the likes of liberal spin-meisters Olbermann, Matthews and Mitchell, and has in its corprate offices the least effective management any corporation of its size could ever have inflicted upon itself.
General Electric sunk its own bottom line and without any input from the turmoil in liquidity market! They serve as no example of a credit crunch hitting the street.
Oops! “company [which] supplies”
bedje, I have the quote from John Wayne on my wall at work. A reminder to myself, when I mess up.
IF we had such are crises:
Paulson would have been fired and
Congress would not have taken a holiday Tuesday.
Flyoverman, is it a poster? I’d be willing to go out and ask for credit no matter the cost. I never knew he said that, but I’d surely love to get hold of it.
Time for Caddyshack!
Danny Noonan: I planned to go to law school after I graduated, but it looks like my folks won’t have enough money to put me through college.
Judge Smails: Well, the world needs ditch diggers, too.
So how is big corporations not getting cheap loans a bad thing?
The mom and pop stores have to put up their homes and maintain good credit to get business loans. They also get hit with a higher interest rate.
Frankly it sounds like a credit crunch for big companies puts them back on the same footing as the little guys.
If McCain keeps misstating the Sonic credit situation and it blows up on him, would that be known as a sonic boom?
The quote is attributed to “The Sands of Iwo Jima.” I did actually see a poster of it once, but I made my own using a picture of The Duke and MS WORD.
Here’s a “Sands of Iwo Jima” picture link:
http://www.trailerfan.com/movie/sands_of_iwo_jima-1949-b/pictures
And I have heard college costs are high BECAUSE of student loans. Universities have no reason to reduce costs as long as students have access to government loans. Maybe without the loans, the cost of going to college will come down.
I don’t see the crisis either. My sister is buying a house as we speak. Her second house I might add. So if the credit is drying up I don’t see it.
Since my parents did HAVE a mortgage (back in the 60s) I couldn’t get a student loan, but I could work every summer(at CrackerJack) and make enough to pay my entire bill(tuition, fees, room and board) for the year. I use to hitch hike back home on weekends.
With the availability of student loans, tuitions and fees have gone through the roof. I have no real sympathy for the students today because they can take a year off if they have to to work for school expenses. If I did I would have gotten drafted.
I honestly think the best thing that can happen is for student loans to dry up. At least I was stuck with a big dept when I graduated (just 2 years of service
Ever hear the phrase:
A solution to a problem that doesn’t exist?
But I must say John McCain disappoints me just a little more every day-and he has been doing it since 1982. From “We are all God’s children so let’s abandon our own people” to “Reaching across the isle” and “My friends on the Left” I want to scream SHUT UP SENATOR, PLEASE!
His Friends on the Left trashed him this last week and the fool talks about “Not the time to fix blame”.
So if we are going to quote the Duke how about:
“Fill your hands you SOBs!”
Well, it just got worse. Sonic is the closet fast food establishment to where I live, so by default their get the bulk of my business. Or rather they used to.
They have tried to modernize their menu, of which 95% is not what I want from Sonic. But the quality of their food has been getting worse over the past few month. My breaking point was Monday night, when their “Extra Long Coney” (which I paid 2 or 3 dollars for) looked like a Slim Jim.
I would have had a better hot dog if I had gone to 7-11 at 4AM.
Just doing the jobs that illegal aliens wont do anymore.
Speaking of…. hows that OUTFLUX of undocumented workers going? Which journalist is standing at the US border reporting on the trafic jams trying to get out of our country?
So let me look out my window again…. Nope, they are still out there weeding the flower beds.
If one place says it can’t give you a loan, then ask around. People used to shop credit, and that is still a reasonable approach.
A friend of mine is a FOREIGN NATIONAL with a green card. That person is having no problem with their current student loan.
This may sound simplistic but let’s give it a try. I believe the cause of all this panicbutton being pushed in Wall Street is that the value of their mortgage back portfolios plummeted down due to foreclosures.
How about if the Feds redirect their bailout money to Main Street by directly sending financial asistance in the form of credit or grant to those homeowners whose homes are on the verge of foreclosure. Homeowners will pay-off their mortgage payments that are in arrears and the bank will have some cash to recycle and provide loans to consumers. The only restriction here is that the assistance can only be used to save someone’s primary residence, not investment properties. The bank should short-sell these investment properties for additional cash flow.
Congress must enact a legislative bill to either repeal or amend the CRA to ensure that banks are allowed to institute their own lending practices without government intervention or NGO’s running interference under the pretense of affirmative action (quotas). Capitalism and socialism are like oil and water, they don’t mix well.
This simplistic method helps the Main Street using their OWN hardearned tax-dollars to help them stay above water. The price tag won’t be a staggering $700B dole out to Wall Street.
John McCain does well on issues he understands, like the surge, use of military force, statesmanship. He needs someone more competent advising him on financial and economic matters. Maybe Mitt would agree to a cabinet position in exchange for giving him advice that DOES NOT make him look clueless on the economy.
I’m just sayin’……..
I heard a caller on the radio yesterday suggest NOW is the time to make demands for political reform. He listed term limits, balanced budgets, line item veto, ending capital gains, fair tax and ending witholding wages for taxes. Since I agree with these myself I hope he is right and this could gain traction, at least some of it. If we are going to get screwed, we may as well get kissed at the same time.
“Can’t we all just get aloan?”
Drudge has a Reuters article up right now with the headline “Auto Sales Plunge As Credit Crunch Hits”
In it I found the factoid: “The top U.S. auto dealership group AutoNation Inc said on Tuesday that car loan approval rates had dropped to about 60 percent from 90 percent a year ago.”
To me this just shows that a majority of buyers can still buy a car. It also shows me that everyone expects the easy money to keep flowing. People need to realize that we have to live within our means and that ones credit worthiness is dependnent on earned income and not how much thier house is worth on paper. It is the easy money to unqualified spenders that inflated the bubble. Our economy was not sustainable as it was and we don’t need a bailout to keep the reckless spending going.
CA has a Vet Loan program that is self sufficient to help Vets get into homes. I suggested to my Senators and Rep that they consider such a direct action to help stablaize the situation. Unfortunatley, my contributions to thier campaign pale in comparison to those of Wall Street power brokers and the Freddie Fannie lobby. I say cut Wall Street out totally.
I would also make the program available to qualified businesses in need of financing.
If this bailout was really necessary then the Dow should jump up like Uma Thurman getting a shot of adrenalin in the chest in the wake of this Senate vote.
Watch when that doesn’t happen.
The real truth is Washington doesn’t give a damn about Wall Street, Main street, or Ma and Pa taxpayer for that matter.
The only entities having their credit lines squeezed are government entities.
The State of California for instance, $ 16 billion in the hole and counting, not to mention all of the city, county, municipal, and quazi government entities that are stinking of bad debt in the golden state.
All of them weighted down by decades of Democratic misrule, the city of Vallejo had declaired bankruptcy, look for more of the cities of Cal to follow suit, that is unless the House decides to give local governments the Oprah’s Mother credit treatment.